Prominent Dover businessman subject of investigation

Wednesday

Jan 16, 2013 at 3:15 AM

By Michelle Kingstonmkingston@fosters.com

DOVER — Dover police and representatives of the Attorney General’s office conducted a search in late November of the home of Nickolas C. Skaltsis, 62, a prominent real estate investor and businessman, after allegations of investment fraud, Foster’s Daily Democrat has learned.

During the search computers and related equipment were confiscated from Skaltsis’ home at 6 Erik Drive.

The search warrant was issued by the Attorney General’s office and sealed by the court at the AG’s request. The warrant was in part the result of multiple civil lawsuits filed in Strafford County Superior Court alleging Skaltsis committed fraud by taking investment money and using it for personal gain or other reasons different from the money’s original intention. It is also alleged Skaltsis did not return the money when requested by investors. Those suits claim a total loss of approximately $200,000.

Foster’s has also learned an examination is being done of the computers to determine whether Skaltsis had committed any civil or criminal activities regarding the use of funds he received. Foster’s has also learned it is possible a determination by the Attorney General’s office as to whether or not any criminal activity was found may happen sometime in the next two weeks.

In late October, an anonymous letter was sent to Dover City Councilors and the Foster’s newsroom detailing allegations of “fraudulent and illegal investment practices” involving Skaltsis, stating he solicited state and local politicians, city council members, municipal and school district employees, friends and senior citizens. It alleges the misuse of approximately $350,000 by Skaltsis over the past two years.

The anonymous letter, signed “investors,” was written as a “cautionary notice,” recommending people who invested with Skaltsis talk with other investors. It advised elected officials and municipal employees to not invest with him and to stop taking his phone calls and emails.

Dover City Councilors said they were unable to do anything with their letters, but at the time planned to hand them over to the police.

“If this turns out to be true, this is very unfortunate for a trusted person in the community to have taken advantage of people,” said Ward 6 City Councilor Michael Weeden.

The anonymous letter was also given to the Attorney General’s office and Foster’s has learned the Consumer Protection Unit took over conducting the investigation. When contacted by Foster’s, Senior Assistant Attorney General for Consumer Protection James Boffetti declined to answer any questions, but did say he was aware of the situation.

“I can’t even tell you what we are doing or not doing,” Boffetti said. “If there was an ongoing investigation, which I’m not saying there is or isn’t, we wouldn’t even comment to confirm any of it. It is just not appropriate.”

While the attorney general’s office would not confirm its own involvement in the case, Dover Police Chief Anthony Colarusso did confirm Dover police do have an active investigation open regarding complaints of financial fraud. Colarusso did not, however, identify any suspects.

“We’ve been looking into some of the allegations,” Colarusso said. “The only thing I can say is that we’re aware of the information in the letter. It (allegations in the letter) was brought to our attention well before this letter and we’re aware of it separately from this letter, but I can’t comment on suspects or outcomes of the investigation.”

At least a half dozen or more investors have acknowledged they put their trust in Skaltsis and have since lost the money they invested in his projects. However, none of the allegations by the investors have been proven.

National Republican Party Committeewoman Phyllis Woods’ daughter, Janice Woods, filed a civil suit on Oct. 5, 2012 indicating she lost $37,000 from Skaltsis and nearly $6,000 in legal fees. A narrative she wrote as part of the suit says she lost the money after connecting with Skaltsis in hopes of him acting as her mentor and teaching her “the ropes of property acquisition, renovation and flipping,” according to Janice Woods’ affidavit.

Janice Woods’ civil suit was filed in October of 2012 and says Skaltsis made promises of paying “investors up to 12-percent annual interest on their loans.”

Janice Woods’ affidavit said she went into a 50-50 partnership with Skaltsis, “with both parties putting down 50% of property down payments and splitting 50% of the net profits on the sale of the properties. It was also understood that Skaltsis would act as general contractor for the property renovations using the money from the ‘investors.’ When it came to contracts, deeds, and paperwork, Skaltsis promised to keep me fully informed and share all documents.”

However, after she wired money to Skaltsis over the summer of 2012 three different times on three different properties in Dover, the result was always the same — according to her affidavit, she was never added to purchase and sales agreements, was never given copies of documents, was given false information about the properties and never received her money back from Skaltsis.

“As a direct result of Skaltsis’s knowing, willful and fraudulent conduct, I have lost $37,000 suffered damage to my reputation, embarrassment and distress, and have been forced to incur legal expenses and costs,” the affidavit read.

Janice Woods, and her attorney, Michael Cairns, have filed a motion for attorneys’ fees, and have asked the court to enter a damages award in excess of $100,000.

“Once the court issues its order and makes a damages award, Skaltsis’ former business partner (Janice Woods) will explore how to go about collecting the damages,” Cairns said.

Woods not only wants her money returned, but hopes to prevent other community members from losing money.

“One of my reasons for filing is to prevent anyone else from having this happen to them so that no one else will be taken advantage of or lied to,” she said. “That is my main purpose.”

Michael and Judith Zalansky, represented by Kimberly J.H. Memmesheimer of Hoefle, Phoenix, Gormley & Roberts, P.A. in Portsmouth, also filed a lawsuit against Skaltsis when their monthly interest payments stopped being delivered in July 2012. They have filed four suits against Skaltsis: Breach of Contract, Unjust Enrichment, Quantum Merit and Piercing the Corporate Veil.

A written complaint in the Zalansky case states, “A review of the Strafford County Registry of Deeds indicates that the real property of the Skaltsises and Phoenix (one of Skaltsis’ businesses) are subject to a number of tax liens and could be lost to the City of Dover.”

As the investigation continues, investors are waiting to hear where Skaltsis’ money has gone.

“We believe he is using our funds to pay off other investors,” the anonymous letter reads. “We have no ‘hard data’ on this, but considering Skaltsis has refused to provide any investor with data; including bank statements, mortgage information, operating expense accounts, or documentation which demonstrates he has engaged in the work of rehabbing distressed homes in the past year. What conclusion could we arrive at considering Skaltsis’ refusal to open his books to the very investors who funded his alleged real estate activities?”

At least three investors have filed ex parte attachments against Skaltsis and his businesses for more than $500,000.

Skaltsis’ whereabouts is unknown. Calls to a number listed as his phone indicated it was disconnected. A Foster’s Daily Democrat reporter also went to Skaltsis’ home at 6 Erik Drive on Tuesday night and knocked on the door. The house was in darkness and there was no response.

Strafford County Deputy Sheriff Paul B. Rowe signed a Non-Est on Dec. 6 that states, “As Commanded, I have made a diligent search and have not been able to find the defendant Nickolas Skaltsis, within my precinct.” Rowe was unable to comment further on where Skaltsis is.

Skaltsis attended Dover schools and went to Keene State College. He has a long list of community service within the community. He served as the chairman of the Dover School Board in 2002 and was on the board of directors for Dover Adult Learning in 2009-2010 and 2010-2011. He was a member of the city’s McConnell Center Advisory Board. He also served as the chairman of the Joint Building Committee and is listed in a DALC newsletter as a donor in the DALC “Come Help Us Grow Campaign.” He was listed as a “Blue Spruces Donor” for up to $499.

Skaltsis owned a lot of property in the area through the years. He used to own the old Masonic Temple Building in Dover’s Lower Square back in the 1980s.

According to Executive Director of Greater Dover Chamber of Commerce Molly Hodgson Smith, Skaltsis was a member of the chamber, but his membership was not renewed “as a result of closure of business.”

Skaltsis was elected as a Delegate to the Republican State Convention at the State Primary held on Sept. 11, 2012.

Attorney Peter Doyle signed some Skaltsis court paperwork as late as November, but now says he is no longer representing Skaltsis and does not know where he is.

Foster’s contacted Dover attorney Alexander Nossiff of Nossiff and Giampa, P.C. to see if he was providing legal representation to Skaltsis in the civil cases. Nossiff, who said he has represented Skaltsis in the past, said he is not representing him in any cases now and is not sure who his attorney is.

“To be honest with you, I have been hearing a lot from people like you and I’m not sure what is and is not accurate,” Nossiff said. “He (Skaltsis) is a stand-up person in Dover. He was born in Dover and has done an awful lot for this community. If it is in fact true, it is very sad.”